Economic Inequality is Squeezing the Middle Class

Today’s post is from Nan Mooney, author of Not Keeping Up With Our Parents: The Decline of the Professional Middle Class. Mooney is also the author of I Can't Believe She Did That: Why Women Betray Other Women at Work and My Racing Heart: The Passionate World of Thoroughbreds and the Track. Mooney’s website is www.nanmooney.com. Mooney is appearing today on NPR's OnPoint.

What am I doing wrong?

In writing Not Keeping Up With Our Parents, I heard this question over and over again. It was the same question I’d been asking myself. I was a successful freelance writer, working on my third book. I typically held down one to two additional jobs — at the time I taught writing and worked as a receptionist at a yoga studio. I was single and relatively unencumbered. But I could barely manage to pay the rent for my shared apartment in Harlem each month. The prospect of having a child or moving to a smaller, more manageable city — surely not unreasonable expectations — both seemed like financial pie in the sky. I’d done everything I was supposed to do. I’d gone to college, worked hard, spent sensibly. So why couldn’t I afford any of the trappings of that middle class lifestyle I was supposed to embody?

In the ensuing months, I would interview over one hundred college-educated, middle class professionals like myself. They came from all over the country, single and in families, fresh out of college or contemplating retirement. I heard more stories than I could ever include in one book. All were unique, yet again and again they chimed the same themes: fear, confusion, the overwhelming sense of financial quicksand.

As I researched further, I discovered that the decline of the professional middle class was due to something far more pervasive than just individuals harboring too high expectations and poor money management skills.

Consider these statistics: College tuitions have gone up 35 percent in the past five years. The average college graduate today carries close to $20,000 in student loan debt. For those who also attend graduate school, the average debt rises to $46,000.

In the late 80s, 56 percent of major corporations still believed that “employees who are loyal to the company and further its business goals deserve an assurance of continued employment.” By the late 90s, that number dropped to just 6 percent.

Health care premiums have increased at five times the rate of inflation since 2000. 46.6 million Americans lack health insurance, almost twice as many as in 1980.

Between 1992 and 2005 CEO pay — including wages, bonuses and stock options — rose a staggering 186 percent, while the average worker experienced an income gain of just 7 percent.

The United States is one of only two industrialized countries in the world that doesn’t offer paid maternity leave to its citizens. In an international survey compiled by the Project on Global Working Families, out of over 168 countries studied, 96 guarantee paid annual leave, 45 also guarantee some form of paid paternal leave for fathers, and 37 mandate paid leave specifically designated for caring for sick children. The U.S. is not among them.

The net worth of black and Latino college graduates is similar to the net worth of white high school graduates.

In 1949, mortgages were equal to 19.7 percent of disposable income; in 2000, they had risen to 66 percent; in 2005, they reached 96 percent of disposable income.

The wealthiest 400 tax payers in the country now pay the same percentage of their earnings in income, Social Security and Medicare taxes as families earning $50,000 to $75,000 a year, those at the heart of the middle class.

2005 was the first year since the Great Depression in which Americans spent more than they earned.

Today, two years after I set out to write Not Keeping Up With Our Parents, things are looking — if anything — worse. The housing bubble has officially burst and the country has tumbled into a recession (whether or not you want to actually call it that), which will lead to job losses and require financial tightening within both working class and middle class families that no longer have any notches left on the belt.

My own circumstances have changed as well. I’m the single mother to a magnificent baby boy. Having him is hands down the best decision I’ve ever made, but I’ve had to move back in with my parents in order to afford it. The thought of someday having enough money that we can live on our own, afford housing, transportation, health insurance child care — seems about as likely as meeting a leprechaun on the street. I don’t mind admitting that, like so many of those I interviewed, I’m scared.

In this election year these economic, social and family issues should be front and center in all our minds. It isn’t that we’ve missed some financial silver bullet everyone else has discovered. The economic inequality that has gripped our country since the 1980s is exerting extreme pressure on everyone from the middle class on down. It’s time for social policies and a social agenda that address the problems haunting the majority of this country. So vote, speak out, get mad and get active.

We really have no choice but change.

You may also be interested in reading this interview with Nan Mooney on Salon.com and a  discussion it inspired at MotherTalkers, her piece about being a single mom living with her parents at Babble.com,  and this piece at BeingFrugal.net about Not Keeping Up With Our Parents and deciding to have children without having all your financial ducks in a row.

Comments

[barry]

Well, you made a choice to have a child, and you lament that you might not, on your own be able to afford health insurance, transportation and housing.

Think about that single parent in the 1950s, compelled to give up the child for adoption, Medicaid not yet conceived, little public transportion and autos that were unaffordable. What would that single parent have done. Hard to say, but she'd not be as lucky as you.

Poor you.

[Green Beans]

Barry,

You’re completely sidestepping the real issue here and making a personal attack (women in the 1950s didn’t have access to reproductive justice). I didn’t have a choice when I decided to not have children: I can’t afford it, even with a graduate degree and two professional jobs (I work all day, every day). I rely on public transportation and live frugally, but the rise in health care, housing, and education leaves me near bankruptcy. It’s another indication of the growing disparity in this country, which feels less and less like a democracy.

[Tracelina]

Barry, I don’t think Nan is claiming that her situation is worse than that of a single mother in the 1950s. I suggest you read her post more clearly (or read her interview in Salon, or listen to her on OnPoint) rather than attacking her for a life decision that you’d presume to tell her she shouldn’t have made.

The truth of the matter for the professional middle class is that getting by is far tougher than in years past. Those of us with a relative amount of privilege—college degrees, middle-class parents, good schooling—are told to “follow our bliss,” to pursue careers that make us tick—journalism, teaching (at the K-12 as well as post-secondary levels), social service, publishing, non-profit work, etc.—not expecting to make lots of money like our friends and classmates in finance, business, consulting, etc., but with the understanding that we’ll at least be able to make ends meet.

College costs have skyrocketed; government funding has gone way down (and what’s left is mostly loans, rather than grants); our parents are trying to keep themselves afloat in a failing economy and are jeopardizing their own possibility of retirement because we can’t pay our bills without their help. Salaries have remained stagnant, even in the face of the ever-larger costs of healthcare, childcare, and housing—none of which are costs that can be cut down, cut out, or deferred. This isn’t a question of pragmatism or frivolity. Even the most penny-pinching of my colleagues and friends are still living paycheck-to-paycheck, and often having to ashamedly ask their parents for help to pay for rent, student loans, dental work, preventive medical care, and other costs that can’t be avoided.

I ask you this: what does it say about the state of class disparity in our nation that those of us with college (and, in many cases, advanced) degrees, who were told that we could, and should, work to improve the state of affairs for those who didn’t have the same advantages we did, can’t pay our [massive student loan, mortgage, and other] bills on the salaries that we earn in these professions? There is an enormous sense of shame involved in admitting, even to one’s closest friends, that one’s salary covers little else but student loan payments and rent. That despite all of the positive messages we received growing up and in college, the hard reality is that it’s now nigh on impossible to get by in life—to say nothing of achieving the modestly comfortable lifestyle most of our parents had—unless we compromise hugely on our moral drive to change the world for others and for ourselves. That isn’t a choice that anyone should have to make, and it’s incredibly disheartening not only that the disparity between the “haves” and everybody else has grown as wide as it has, but also that there are those who want to cast aspersions and throw blame on those of us who’ve ended up there.